The PMI fell to 50.4 for the month of May. Forecast drop to 52.2. For months state and private industries have been hard hit, with warehouses full of unsold products. In Hong Kong sale of luxury products down by 5%. Doubts about a new aid package.

Beijing (AsiaNews / Agencies) - With a lower figure than expected, China's PMI (Purchasing Managers' Index) in May was 50.4, the lowest this year, a further signal that the second world economy is slowing.

The PMI index signals industrial activity: a value below 50 indicates contraction; above growth. China's PMI in April was 53.3, and many experts had predicted a decline to only 52.2.

The official PMI is calculated mainly with an eye to the large state-owned industries. What is quite certain is that private industry - less subsidized and protected - are in a major crisis. The PMI calculated by HSBC shows that these industries have marked a decline for at least seven months.

The slowdown in China is also making waves in Hong Kong, where retail sales - especially of luxury goods, operated by wealthy rich Chinese - were down 5% on annual average.

Investors always hope in the government's decision to launch a new aid package for the economy, but many Chinese experts have warned Beijing not to provoke risky asset price bubbles and higher inflation.

According to analysts, the PMI will drop even more because the Chinese manufacturing industries have warehouses full of unsold products due to the overproduction of recent years.

The same analysts predict that in 2012 the growth in China will be a 7.9, the lowest since 2009, when it reached 8% after years of double digit growth.

 

• CHINA
• manufacturing
• industry
• growth
• decline
• cirsis
• government
• economy